Greggs focuses on bakery in new high street pilot

14 August, 2009

Page 4

Greggs is piloting a new type of high street store, which emphasises the retailer's bakery roots and makes 'grab-and-go' purchases easier, as it gears up for an accelerated round of shop openings next year.

Two further 'new concept' stores are due to open this year ahead of plans to roll-out at least 30-40 new shops in 2010 as part of Greggs' long-term ambition to increase its estate from 1,400 stores to over 2,000.

The bakery chain revealed its intentions as it announced half-year operating profits this week of £16.3m, up 8.9%. Sales grew 4.4% to £312m, although like-for-like sales were up by just 1.5%, due to the impact of the wet summer. Net profit, however, fell to £11.4m, compared to £16.2m for the comparable period last year.

The new concept store in Bromley, Kent, which opened last month, features a darker colour scheme with pictures on the wall of the bread-making process and messages high-lighting the freshness of Greggs' products. There is also more space on the shop floor for customers to browse and a greater range of impulse products that can be bought without having to be served at the counter.

"We are trying to put all our latest thinking into one shop. On the back of that we'll decide whether we're going to roll [it] out into our existing 1,400 shops or roll it into the 600 shops going forward," said chief executive Ken McMeikan.

Greggs' plan to centralise and simplify the business is on track, with 40% of the 164 Bakers Oven shops now rebranded as Greggs and plans to harmonise 80% of products by the end of the year on schedule. The retailer's sandwiches and savouries have been relaunched across stores, while revamped products in the first half included yums yums, Belgian buns and two types of pasty.